New mobility and transportation are on the hype; huge media coverage, billions of investments, M&A happening on a monthly basis and a common enthusiasm among the business community from all over the world. The convergence of multiple industries (Automotive, Public transportation, Energy and electrification, Shared mobility, Autonomous driving) are shaping the market and changing the boundaries among private vs public, ownership vs utilization and much more.

Source: Bank of America Merrill Lynch

Ok.. we dream that in 2030-2040 all these transformations will be normal and many of us (or our children) will go around cities with flying cars available on a bottom through our smartphone..but what should we really expect happening in few coming years?

Here what I would realistically expect;

Electric vehicle industry and market: Electrification will be one the most concrete changes. Many investments have been done in the last 5/7 years and top car makers have clear pipeline for new products starting from premium level with a top down strategy. Tesla will be challenged by German automakers but if Model3 will maintain its promises there will be a lot of competition. Regional markets will see different developments: EU will grow slowly and even if there will be some exemptions (Nordics and likely UK and Netherlands) big volumes will arrive after the next 3-5 years once the charging infrastructures will be highly deployed. US will ramp up but in jeopardize markets, according to state and local policies. That will be positive anyway considered how US economy is localized. China is the leading region, not only due to Government commitment, but also because of components technology industry leadership (battery cells). Not sure how many among recent Chinese/global EV brands will be successful (Byton, Nio, FaradayFuture, Leeco) even if all of them have global similar organization (design and Engineer in EU, manufacturing in China, Headquarter and innovation in California). India shall be a interesting new area to look at. Growing economy, highly populated with a strong political commitment to shift towards EV (30% of EV by 2030). Infrastructures is a big gap but good quality products availability is also a limit so far waiting for big car makers to deploy premium vehicles. But 2 and 3 wheelers will be the the real challenge since those are the most popular vehicle, affordable for low income population and largely available, unfortunately these vehicles are generally cheap and not much technology is needed.

Autonomous driving: this trend is polarized: people either love embracing self driving car or just will never want to see someone out of the driver seat. Culture, safety, car passion.. every position is fair but will likely see early stage applications of self driving vehicles based on region economics and regulatory framework. While in US tech

Source: TumCreate- DAM.

companies developed software suites and operations based on traditional cars equipped with ADAS, Europe seems to be little behind also due to more strict regulation and less
attitude in letting autonomous car driving on public roads. But this approach doesn’t mean that once legal aspects will be set European player (and its historical car maker industry) will catch up and potentially “win” the long term run. We’ll likely see multiple use cases tests with a public transport oriented approach and last mile services using small shuttles.

Sharing Mobility: This is likely my favorite topic. After several projects, services and business models tested by a number of different brands, from automakers, to rental companies and public transport operators, we’ll move into a consolidation phase, following two directions: many companies will merge to survive to competition specially because shared mobility is a low profit business and requires high economy of scale, larger companies will compete on multimodal services, integrating bikesharing, scooter sharing or moped (or light scooters.. naming is not standard yet). Again regulation will be a key topic as some of these innovation (specially free floating base) are highly discussed and public sentiment is often controversial.

For sure.. doesn’t matter which area of business you are focused on, it’s clear that there will be much to learn and new competences and skills will be required. Not referring to engineering and software sides only, but from operational perspective we’ll face new players and existing ones building knowledgable organizations leveraging a mix of digital and automotive experiences, combined with social, economics, transportation and sharing economy. While once we’ll have many operators and technologies in place..big data management and interoperability will be next business to address.. but later on.

We are quite aware that future business model for carmakers is mobility oriented more than car focused. All brands are moving to become miles/km providers, much bigger market than struggling selling cars to dealers and customers.

Weekly news support this future.. but the focus of this post is more about the business side. How to make money in this new shaping industry?

The convergence of electric and autonomous technologies, public regulations, tradeoff between public/private business, integration of fleet management, long-term and short-term rentals are disrupting multiple traditional businesses and shaping a completely new competitive arena where different industries want to play the game.

We see car makers directly moving to mobility (brand like Moia, Maven, IMotion, Moovel, Lynk&co just to mention few ones) or huge public transports operators (Deutsche-Bahn, Transdev, Keolis) extending their offer to ride-sharing pilots, or big rental companies embracing sharing mobility (corporate or privately based) and don’t forget new players often heavily backed (Zoox) or leading forefront giants like Uber or Waymo.

Quite a crowded arena, specially if we consider that none of those players really own the whole stack of services that future business will require. Even more if we understand that final stage of this change will be the coming popular definition “Mobility as a Service” clearly described in this picture by Sampo Hietanen, pioneer entrepreneur running his Maas Global company.

Starting from here I outline some of the most important topics to be considered addressing this market based on assumptions that only few companies will have the resources (money, team, assets) to scale globally and we’ll probably see many providers acting locally followed by an increasing number of M&A.

Full mobility service business case is based on a tailored range of vehicles according to client’s preferences. Vehicles will feature new design (cars/van/minibus/light-freight) with multiple mobility targets. Vehicles will be initially electric and autonomous in a short timeline of period (local deployment according to regulations). In some regions it’s possible to include 2 wheels in the game.

Fleet Financing (leasing/rental) will be a core business because even if we think about the future.. we’ll still need someone to own and rent cars for mobility. At least until we’ll move in 3 dimensions instead of 2 and flying car will hit the road.. (actually the sky) of our cities.

Business operations: the business case includes a broad range of operations:

It’s always nice visiting the IAA in Frankfurt, where the Automotive industry showcases its power and vision. Car manufactures invest millions in huge booths, actually entire buildings to prove the market is well alive and strongly committed in new product and services.

Audi Arena

But among many common expectations this year an innovation came to the mainstream framework. An entire pavilion focuses on New Mobility, integrating connected cars, e-mobility, sharing economy and start ups. A complete mix that brought the attention of main players of these markets too facing new business models and users experiences. Some brands comes directly from automotive like Daimler group showcasing Car2go, Mytaxi and Moovel platform (the overall offer in new mobility). Or more recent starts up like BlaBlaCar that just announced 200 mln € new investment to scale the business globally. Institutions participated, G7 Minister of transports meeting took place with top level participations on future political and industrial trends. Italian Minister of Transport visited the event and in its official agenda he stopped by the Spin8 Italian start up just launched to the market to deploy a clever network of charging infrastructures for electric vehicles. Good signal that market is growing and interest from investors and institutions is increasing. After decades of pilots projects, finally New Mobility is coming to mainstream market, both from services and new business model. Let’s move on.